Winnebago Industries, Inc. (NYSE: WGO), a leading outdoor lifestyle product manufacturer, today reported financial results for the Company's fourth quarter and full year Fiscal 2020.

Fourth Quarter Fiscal 2020 ResultsRevenues for the Fiscal 2020 fourth quarter ended August 29, 2020, were $737.8 million, an increase of 39.1% compared to $530.4 million for the Fiscal 2019 period. Revenues for Newmar, which was acquired in the first quarter of Fiscal 2020, were $126.3 million. Revenues excluding Newmar were $611.5 million, reflecting an organic increase of 15.3% compared to the Fiscal 2019 period primarily driven by growth in the Towable segment. Gross profit was $122.5 million compared to $83.2 million for the Fiscal 2019 period. Gross profit margin increased 90 basis points in the quarter, driven by Motorhome segment lower input costs and Towable segment fixed cost leverage, partially offset by segment mix. Operating income was $68.4 million for the quarter, an increase of 52.8% compared to $44.8 million for the fourth quarter last year, driven by Towable segment revenue growth and the addition of Newmar. Fiscal 2020 fourth quarter net income was $42.5 million, an increase of 33.2% compared to $31.9 million in the fourth quarter of last year, driven by the growth in operating income partially offset by increased interest expense.  The increase in interest expense is related to the convertible bond issued to finance the acquisition of Newmar, and separately, the write-off of certain debt issuance costs associated with the termination of the company's Term Loan B which was refinanced by a bond issuance during the quarter. Earnings per diluted share was $1.25, an increase of 23.8% compared to $1.01 in the same period last year. Adjusted earnings per diluted share was $1.45 for the fourth quarter, an increase of 45.0% compared to adjusted earnings per diluted share of $1.00 in the same period last year. Fiscal 2020 fourth quarter consolidated adjusted earnings per diluted share excludes costs totaling $6.6 million, or $0.20 per diluted share, after tax, driven by debt issuance costs written off due to the termination of the Term Loan B, and the non-cash portion of interest expense related to the convertible bond. Consolidated Adjusted EBITDA was $76.5 million for the quarter, compared to $50.8 million last year, representing an increase of 50.5%.

President and Chief Executive Officer Michael Happe commented, “In the face of the unprecedented impacts of the COVID-19 pandemic, our strong fourth quarter finish to the year was a testament to the incredible resolve of our world-class team, the strength of our portfolio of leading outdoor lifestyle brands, and our efficiency in quickly and safely resuming operations to meet tremendous consumer demand. We added motorized scale through the acquisition of Newmar and continued to grow our RV market share throughout the year by leveraging strong dealer relationships, exciting new products and record consumer interest. Winnebago Industries also generated expanded margins and stronger cash flows, while delivering a quality product and customer experience in collaboration with our channel partners. Looking ahead, we enter our 2021 fiscal year with four premier brand platforms, strong operational momentum, a record backlog, and the financial flexibility to manage through the ongoing uncertainty in the environment. Our efforts continue to rally around building an extraordinary outdoor lifestyle company, and creating value for our end customers, dealers, employees and shareholders. I want to thank all of our Winnebago Industries employees for their resilience and commitment during these unique times and focusing on giving our customers a safe and memorable experience with our products in the outdoors."

Full Year Fiscal 2020 ResultsFiscal 2020 revenues of $2.4 billion increased 18.6% from $2.0 billion in Fiscal 2019. Revenues for Newmar, which was acquired in the first quarter of Fiscal 2020, were $388.4 million. Revenues excluding Newmar were $2.0 billion, roughly flat with Fiscal 2019 as a result of the impacts of the COVID-19 pandemic and related suspension of manufacturing operations during the Fiscal 2020 third quarter and disruptions across the dealer network, supply chain, and end consumers. Gross profit margin decreased 220 basis points, primarily due to the mix impact of adding Newmar as well as the related purchase accounting impacts, and the impact of COVID-19 during the fiscal third quarter. Operating income was $113.8 million for Fiscal 2020, compared to $155.3 million in Fiscal 2019. Net income for Fiscal 2020 was $61.4 million, a decrease of 45.0% compared to $111.8 million in Fiscal 2019 due to the impact of COVID-19 and increased interest expense.  The increase in interest expense is related to the convertible bond issued to finance the acquisition of Newmar, and separately, the write-off of certain debt issuance costs associated with the termination of the company's Term Loan B which was refinanced by a bond issuance during the fourth quarter. Fiscal 2020 earnings per diluted share was $1.84, a decrease of 47.7% compared to earnings per diluted share of $3.52 in Fiscal 2019. Adjusted earnings per diluted share was $2.58 for Fiscal 2020, compared to adjusted earnings per diluted share of $3.45 in the same period last year. Fiscal 2020 consolidated adjusted earnings per diluted share excludes costs totaling $25.0 million, or $0.75 per diluted share, after tax, related to the non-cash portion of interest expense associated with the convertible bond, Newmar acquisition-related costs, debt issuance costs written off due to the termination of the Term Loan B and restructuring costs. Adjusted earnings per diluted share was also impacted by the share consideration issued in the Newmar acquisition. Fiscal 2020 consolidated Adjusted EBITDA was $168.1 million, a decrease of 6.4% from $179.7 million in Fiscal 2019.

Towable Fourth Quarter and Full Year Fiscal 2020 ResultsRevenues for the Towable segment were $414.0 million for the fourth quarter, up 34.8% over the prior year, primarily driven by strong consumer demand for outdoor experiences, particularly in Grand Design products. Segment Adjusted EBITDA was $61.3 million, up 45.8% over the prior year period. Adjusted EBITDA margin of 14.8% increased 110 basis points, primarily due to leverage, but also benefiting from profitability initiatives. Backlog increased to a record $747.9 million, up 219.2% over the prior year, as dealers have experienced sizable reductions to their inventory as they have encountered extremely high levels of consumer demand in the fourth quarter.

For the full year Fiscal 2020, revenues for the Towable segment were $1.23 billion, up 2.5% from Fiscal 2019. Segment Adjusted EBITDA for the full year was $148.3 million, down 9.4% from Fiscal 2019 driven by the impact of COVID-19 during the Fiscal 2020 third quarter. Adjusted EBITDA margin of 12.1% decreased 160 basis points for the full year.

Motorhome Fourth Quarter and Full Year Fiscal 2020 ResultsIn the fourth quarter, revenues for the Motorhome segment were $301.8 million, up 50.4% from the prior year, driven by the addition of Newmar. Revenues excluding Newmar were $175.5 million, down 12.6%, as strong class B sales were more than offset by sales declines in class A and class C. Segment Adjusted EBITDA was $19.5 million, up 81.2% from the prior year due to improved profitability in the Winnebago branded business and the addition of Newmar, partially offset by the organic revenue decline and class mix. Adjusted EBITDA margin of 6.4% increased 100 basis points. Backlog increased to a record $1.1 billion, up 535.8% over the prior year, reflecting extremely high levels of consumer demand.

For the full year Fiscal 2020, revenues for the Motorhome segment were $1.1 billion, up 49.5% from Fiscal 2019. Revenues excluding Newmar were $668.4 million, down 5.4% from Fiscal 2019, as a result of manufacturing and distribution disruption due to the COVID-19 pandemic. Segment Adjusted EBITDA for the full year was $32.9 million, up 20.0% from Fiscal 2019 driven by the addition of Newmar partially offset by the impact of COVID-19 during the Fiscal 2020 third quarter. Adjusted EBITDA margin of 3.1% was down 80 basis points for the full year due to the impact of COVID-19 during the Fiscal 2020 third quarter partially offset by the addition of Newmar.

Balance Sheet and Cash FlowAs of August 29, 2020, the Company had total outstanding debt of $512.6 million ($600.0 million of debt, net of convertible note discount of $74.3 million, and net of debt issuance costs of $13.1 million) and working capital of $413.2 million. Cash flow from operations was $270.4 million for the full year Fiscal 2020, resulting in an increase of $136.7 million, or 102.2%, from the $133.8 million generated in Fiscal 2019.

Quarterly Cash DividendOn August 19, 2020, the Company’s board of directors approved a quarterly cash dividend of $0.12 per share payable on September 30, 2020, to common stockholders of record at the close of business on September 16, 2020. This represents a 9% increase from the prior dividend of $0.11 per share.

Mr. Happe continued, “As we look ahead to Fiscal 2021, we are encouraged by the ongoing outdoor recreation demand trends we are experiencing.  We have built a strong and growing position in the RV market, and our customers continue to view all our brands as a trusted and safe way to have extraordinary experiences as they travel, live, work, and play in the outdoors. I’m incredibly proud of the progress we have made over the last several years expanding Winnebago Industries' portfolio while simultaneously enhancing the quality of our product lineup and service levels and the profitability we are able to achieve. During fiscal year 2020, we continued to expand our family of outstanding brands with the acquisition of Newmar, and when combined with our Winnebago, Grand Design RV, and Chris-Craft brands, we believe we have four of the most respected brands in the outdoors industry. We have expanded our leadership team capabilities as well in the past year, through the acquisition of Newmar and also through adding new talent to the team in Huw Bower to lead our Winnebago Outdoors business, as announced at the end of September. Going forward, we are committed to managing our Company in a highly disciplined fashion so that we are best positioned to build on our momentum in the marketplace, capture the numerous opportunities we believe lie ahead and deliver further value to the customers and communities we serve. Finally, Fiscal 2020 also marks an inflection point in our efforts to improve on our corporate responsibility obligations. It is our strong intention that through these initiatives, our Winnebago Industries team will emerge as an even stronger leader in our communities, and in so doing, will make a meaningful contribution to an improvement in the many dimensions of social justice.”

Conference CallWinnebago Industries, Inc. will discuss fourth quarter and full year Fiscal 2020 earnings results during a conference call scheduled for 9:00 a.m. Central Time today. Members of the news media, investors and the general public are invited to access a live broadcast of the conference call via the Investor Relations page of the Company's website at http://investor.wgo.net. The event will be archived and available for replay for the next 90 days.

About Winnebago IndustriesWinnebago Industries, Inc. is a leading North American manufacturer of outdoor lifestyle products under the Winnebago, Grand Design, Chris-Craft, and Newmar brands, which are used primarily in leisure travel and outdoor recreation activities. The Company builds quality motorhomes, travel trailers, fifth wheel products and boats. Winnebago Industries has multiple facilities in Iowa, Indiana, Minnesota and Florida. The Company's common stock is listed on the New York Stock Exchange and traded under the symbol WGO. For access to Winnebago Industries' investor relations material or to add your name to an automatic email list for Company news releases, visit http://investor.wgo.net.

Forward Looking StatementsThis press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not limited to increases in interest rates, availability of credit, low consumer confidence, availability of labor, significant increase in repurchase obligations, inadequate liquidity or capital resources, availability and price of fuel, a slowdown in the economy, increased material and component costs, availability of chassis and other key component parts, sales order cancellations, slower than anticipated sales of new or existing products, new product introductions by competitors, the effect of global tensions, integration of operations relating to mergers and acquisitions activities, business interruptions, any unexpected expenses related to enterprise resource planning, impacts of public health crises, such as COVID-19, risks related to compliance with debt covenants and leverage ratios, cyber-attacks, and other factors. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained in the Company's filings with the Securities and Exchange Commission (SEC) over the last 12 months, copies of which are available from the SEC or from the Company upon request. The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this release or to reflect any changes in the Company's expectations after the date of this release or any change in events, conditions or circumstances on which any statement is based, except as required by law.

Winnebago Industries, Inc.Condensed Consolidated Statements of Income(Unaudited and subject to reclassification)

   
  Three Months Ended
(in thousands, except percent and per share data) August 29, 2020   August 31, 2019
Net revenues $ 737,807       100.0 %   $ 530,396       100.0 %
Cost of goods sold 615,298       83.4 %   447,208       84.3 %
Gross profit 122,509       16.6 %   83,188       15.7 %
Selling, general, and administrative expenses 50,521       6.8 %   35,992       6.8 %
Amortization of intangible assets 3,590       0.5 %   2,431       0.5 %
Total operating expenses 54,111       7.3 %   38,423       7.2 %
Operating income 68,398       9.3 %   44,765       8.4 %
Interest expense 14,321       1.9 %   4,646       0.9 %
Non-operating income (514 )     (0.1 )%   (251 )     %
Income before income taxes 54,591       7.4 %   40,370       7.6 %
Provision for income taxes 12,132       1.6 %   8,502       1.6 %
Net income $ 42,459       5.8 %   $ 31,868       6.0 %
               
Income per common share:              
Basic $ 1.26           $ 1.01        
Diluted $ 1.25           $ 1.01        
Weighted average common shares outstanding:              
Basic 33,641           31,507        
Diluted 33,929           31,696        
               
  Year Ended
(in thousands, except percent and per share data) August 29, 2020   August 31, 2019
Net revenues $ 2,355,533       100.0 %   $ 1,985,674       100.0 %
Cost of goods sold 2,042,605       86.7 %   1,678,477       84.5 %
Gross profit 312,928       13.3 %   307,197       15.5 %
Selling, general, and administrative expenses 177,061       7.5 %   142,295       7.2 %
Amortization of intangible assets 22,104       0.9 %   9,635       0.5 %
Total operating expenses 199,165       8.5 %   151,930       7.7 %
Operating income 113,763       4.8 %   155,267       7.8 %
Interest expense 37,461       1.6 %   17,939       0.9 %
Non-operating income (974 )     %   (1,581 )     (0.1 )%
Income before income taxes 77,276       3.3 %   138,909       7.0 %
Provision for income taxes 15,834       0.7 %   27,111       1.4 %
Net income $ 61,442       2.6 %   $ 111,798       5.6 %
               
Income per common share:              
Basic $ 1.85           $ 3.55        
Diluted $ 1.84           $ 3.52        
Weighted average common shares outstanding:              
Basic 33,236           31,536        
Diluted 33,454           31,721        

Percentages may not add due to rounding differences.

Winnebago Industries, Inc. Condensed Consolidated Balance Sheets(Unaudited and subject to reclassification)

(in thousands) August 29, 2020   August 31, 2019
Assets      
Current assets:      
Cash and cash equivalents $ 292,575     $ 37,431  
Receivables, net 220,798     158,049  
Inventories 182,941     201,126  
Prepaid expenses and other assets 17,296     14,051  
Total current assets 713,610     410,657  
Property, plant, and equipment, net 174,945     127,572  
Other assets:      
Goodwill 348,058     274,931  
Other intangible assets, net 404,768     256,082  
Investment in life insurance 27,838     26,846  
Operating Lease Assets 29,463      
Other assets 15,018     8,143  
Total assets $ 1,713,700     $ 1,104,231  
       
Liabilities and Stockholders' Equity      
Current liabilities:      
Accounts payable $ 132,490     $ 81,635  
Income taxes payable 8,840      
Accrued expenses 159,060     107,217  
Current maturities of long-term debt     8,892  
Total current liabilities 300,390     197,744  
Non-current liabilities:      
Long-term debt, less current maturities 512,630     245,402  
Deferred income taxes 15,608     12,032  
Unrecognized tax benefits 6,511     3,591  
Operating Lease Liabilities 27,048      
Deferred compensation benefits, net of current portion 11,130     12,878  
Other 12,917     372  
Total non-current liabilities 585,844     274,275  
Stockholders' equity 827,466     632,212  
Total liabilities and stockholders' equity $ 1,713,700     $ 1,104,231  

Winnebago Industries, Inc.Condensed Consolidated Statements of Cash Flows(Unaudited and subject to reclassification)

  Year Ended
(in thousands) August 29, 2020   August 31, 2019
Operating activities:      
Net income $ 61,442       $ 111,798    
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation 15,997       13,682    
Amortization of intangibles 22,104       9,635    
Non-cash interest expense, net 10,727          
Amortization of debt issuance costs 7,379       1,612    
Last in, first-out expense (5,188 )     2,258    
Stock-based compensation 6,475       7,058    
Deferred income taxes (879 )     7,984    
Other, net 2,405       1,313    
Change in assets and liabilities:      
Receivables (25,773 )     6,418    
Inventories 105,994       (8,256 )  
Prepaid expenses and other assets (358 )     (4,499 )  
Accounts payable 37,041       907    
Income taxes and unrecognized tax benefits 11,422       (13,810 )  
Accrued expenses and other liabilities 21,646       (2,350 )  
Net cash provided by operating activities 270,434       133,750    
Investing activities:      
Purchases of property and equipment (32,377 )     (40,858 )  
Acquisition of business, net of cash acquired (260,965 )     (702 )  
Proceeds from the sale of property       148    
Other, net 266       2,476    
Net cash used in investing activities (293,076 )     (38,936 )  
Financing activities:      
Borrowings on long-term debt 2,786,824       891,892    
Repayments on long-term debt (2,446,824 )     (930,424 )  
Purchase of convertible bond hedge (70,800 )        
Proceeds from issuance of warrants 42,210          
Payments of cash dividends (14,588 )     (13,670 )  
Payments for repurchases of common stock (1,844 )     (8,171 )  
Payments of debt issuance costs (18,030 )        
Other, net 838       648    
Net cash provided by (used in) financing activities 277,786       (59,725 )  
       
Net increase (decrease) in cash and cash equivalents 255,144       35,089    
Cash and cash equivalents at beginning of year 37,431       2,342    
Cash and cash equivalents at end of year $ 292,575       $ 37,431    
       
Supplement cash flow disclosure:      
Income taxes paid, net $ 3,667       $ 37,061    
Interest paid $ 17,253       $ 14,921    
Non-cash transactions:      
Issuance of Winnebago common stock for business acquisition $ 92,572       $    
Capital expenditures in accounts payable $ 178       $ 387    
                   

Winnebago Industries, Inc.Supplemental Information by Reportable Segment - Towable(in thousands, except unit data)(Unaudited and subject to reclassification)

  Three Months Ended
  August 29, 2020   % of Revenues   August 31, 2019   % of Revenues   $ Change   % Change
Net revenues $ 413,956         $ 306,992         $ 106,964       34.8 %
Adjusted EBITDA 61,294     14.8 %   42,039     13.7 %   19,255       45.8 %
                       
  Three Months Ended
Unit deliveries August 29, 2020   Product Mix(1)   August 31, 2019   Product Mix(1)   Unit Change   % Change
Travel trailer 7,865     61.9 %   5,894     62.4 %   1,971       33.4 %
Fifth wheel 4,832     38.1 %   3,553     37.6 %   1,279       36.0 %
Total towables 12,697     100.0 %   9,447     100.0 %   3,250       34.4 %
                       
  Year Ended
  August 29, 2020   % of Revenues   August 31, 2019   % of Revenues   $ Change   % Change
Net revenues $ 1,227,567         $ 1,197,327         $ 30,240       2.5 %
Adjusted EBITDA 148,276     12.1 %   163,677     13.7 %   (15,401 )     (9.4 )%
                       
  Year Ended
Unit deliveries August 29, 2020   Product Mix(1)   August 31, 2019   Product Mix(1)   Unit Change   % Change
Travel trailer 23,184     61.2 %   22,458     61.0 %   726       3.2 %
Fifth wheel 14,706     38.8 %   14,371     39.0 %   335       2.3 %
Total towables 37,890     100.0 %   36,829     100.0 %   1,061       2.9 %
                       
  August 29, 2020       August 31, 2019       Change   % Change
Backlog(2)                      
Units 24,903         7,225         17,678       244.7 %
Dollars $ 747,925         $ 234,339         $ 513,586       219.2 %
Dealer Inventory                      
Units 10,528         15,658         (5,130 )     (32.8 )%

(1) Percentages may not add due to rounding differences.

(2) We include in our backlog all accepted orders from dealers which generally have been requested to be shipped within the next six months. Orders in backlog can be cancelled or postponed at the option of the dealer at any time without penalty and, therefore, backlog may not necessarily be an accurate measure of future sales.

Winnebago Industries, Inc.Supplemental Information by Reportable Segment - Motorhome(in thousands, except unit data)(Unaudited and subject to reclassification)

  Three Months Ended
  August 29, 2020   % of Revenues   August 31, 2019   % of Revenues   $ Change   % Change
Net revenues $ 301,771         $ 200,698         $ 101,073       50.4 %
Adjusted EBITDA 19,461     6.4 %   10,739     5.4 %   8,722       81.2 %
                       
  Three Months Ended
Unit deliveries August 29, 2020   Product Mix(1)   August 31, 2019   Product Mix(1)   Unit Change   % Change
Class A 690     30.2 %   253     12.7 %   437       172.7 %
Class B 1,064     46.6 %   937     47.2 %   127       13.6 %
Class C 527     23.1 %   795     40.1 %   (268 )     (33.7 )%
Total motorhomes 2,281     100.0 %   1,985     100.0 %   296       14.9 %
                       
  Year Ended(2)
  August 29, 2020   % of Revenues   August 31, 2019   % of Revenues   $ Change   % Change
Net revenues $ 1,056,794         $ 706,927         $ 349,867       49.5 %
Adjusted EBITDA 32,949     3.1 %   27,455     3.9 %   5,494       20.0 %
                       
  Year Ended
Unit deliveries August 29, 2020   Product Mix(1)   August 31, 2019   Product Mix(1)   Unit Change   % Change
Class A 2,493     30.8 %   1,582     20.8 %   911       57.6 %
Class B 3,351     41.3 %   2,784     36.7 %   567       20.4 %
Class C 2,261     27.9 %   3,225     42.5 %   (964 )     (29.9 )%
Total motorhomes 8,105     100.0 %   7,591     100.0 %   514       6.8 %
                       
  August 29, 2020       August 31, 2019       Change   % Change
Backlog(3)                      
Units 8,463         1,808         6,655       368.1 %
Dollars $ 1,051,415         $ 165,373         $ 886,042       535.8 %
Dealer Inventory                      
Units 2,761         3,891         (1,130 )     (29.0 )%

(1) Percentages may not add due to rounding differences.

(2)  August 29, 2020 year end data includes Newmar results from the time of acquisition (11/08/19); 2019 data excludes Newmar for both the three month ended and year end periods

(3) We include in our backlog all accepted orders from dealers which generally have been requested to be shipped within the next six months. Orders in backlog can be cancelled or postponed at the option of the dealer at any time without penalty and, therefore, backlog may not necessarily be an accurate measure of future sales.

Winnebago Industries, Inc.Non-GAAP Reconciliation(Unaudited and subject to reclassification)

Non-GAAP financial measures, which are not calculated or presented in accordance with accounting principles generally accepted in the United States (“GAAP”), have been provided as information supplemental and in addition to the financial measures presented in the accompanying news release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the news release. The non-GAAP financial measures presented may differ from similar measures used by other companies.

The following table reconciles Diluted income per share to Adjusted diluted income per share:

  Three Months Ended   Year Ended
(in thousands)(1) August 29, 2020   August 31, 2019   August 29, 2020   August 31, 2019
Diluted income per share $ 1.25       $ 1.01       $ 1.84       $ 3.52    
Pretax acquisition-related costs (1)             0.29          
Pretax acquisition-related fair-value inventory step-up             0.14          
Pretax non-cash interest expense (2) 0.10             0.32          
Restructuring expense 0.01       (0.01 )     0.05       0.03    
Debt issuance write-off 0.14             0.14          
Research and development tax credits                   (0.10 )  
Tax impact of adjustments (3) (0.05 )           (0.20 )     (0.01 )  
Adjusted diluted income per share (4) $ 1.45       $ 1.00       $ 2.58       $ 3.45    

(1) Per share numbers may not foot due to rounding(2) Represents transaction-closing costs.(3) Non-cash interest expense associated with the Convertible Notes issued related to our acquisition of Newmar.(4) Income tax charge calculated using the statutory tax rate for the U.S. of 21.0% for both periods presented.

The following table reconciles net income to consolidated EBITDA and Adjusted EBITDA.

  Three Months Ended   Year Ended
(in thousands) August 29, 2020   August 31, 2019   August 29, 2020   August 31, 2019
Net income $ 42,459       $ 31,868       $ 61,442       $ 111,798    
Interest expense 14,321       4,646       37,461       17,939    
Provision for income taxes 12,132       8,502       15,834       27,111    
Depreciation 4,143       3,894       15,997       13,682    
Amortization of intangible assets 3,590       2,431       22,104       9,635    
EBITDA 76,645       51,341       152,838       180,165    
Acquisition-related fair-value inventory step-up             4,810          
Acquisition-related costs             9,761          
Restructuring 393       (253 )     1,640       1,068    
Non-operating income (514 )     (251 )     (974 )     (1,581 )  
Adjusted EBITDA $ 76,524       $ 50,837       $ 168,075       $ 179,652    

We have provided non-GAAP performance measures of Adjusted diluted income per share, EBITDA, and Adjusted EBITDA as comparable measures to illustrate the effect of non-recurring transactions occurring during the reported periods and improve comparability of our results from period to period. Adjusted diluted income per share is defined as income per share adjusted for items that impact the comparability of our results from period to period. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation and amortization expense, and other adjustments made in order to present comparable results from period to period. We believe Adjusted diluted income per share and Adjusted EBITDA provide meaningful supplemental information about our operating performance because these measures exclude amounts that we do not consider part of our core operating results when assessing our performance. Examples of items excluded from Adjusted income per share include acquisition-related costs, acquisition-related fair-value inventory step-up, non-cash interest expense, and the tax impact of the adjustments. Examples of items excluded from Adjusted EBITDA include acquisition-related fair-value inventory step-up, acquisition-related costs, restructuring expenses, and non-operating income.

Management uses these non-GAAP financial measures (a) to evaluate our historical and prospective financial performance and trends as well as our performance relative to competitors and peers; (b) to measure operational profitability on a consistent basis; (c) in presentations to the members of our board of directors to enable our board of directors to have the same measurement basis of operating performance as is used by management in its assessments of performance and in forecasting and budgeting for our company; (d) to evaluate potential acquisitions; and (e) to ensure compliance with restricted activities under the terms of our ABL credit facility and outstanding notes.  We believe these non-GAAP financial measures are frequently used by securities analysts, investors, and other interested parties to evaluate companies in our industry.

Contact: Steve Stuber - Investor Relations - 952-828-8461 - srstuber@wgo.netMedia Contact: Sam Jefson - Public Relations Specialist - 641-585-6803 - sjefson@wgo.net

 

 

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